CWA Bashes Lucent Over Plant Closing

Unionized workers at Lucent's Norcross, Georgia, plant have become among the most vocal, and angry, of the thousands of employees who have seen their once-secure jobs, pension benefits and future seem to evaporate.

Communications Workers of America executives in Washington say the union is continuing to negotiate with the proposed buyers of the Lucent Technologies fiber optic plant in Norcross, Georgia, over existing contract agreements and other issues.

But union workers at the plant - who will end up among the statistics in a massive workforce reduction still underway at Lucent - have become among the most vocal, and angry, of the thousands of employees who have seen their once-secure jobs, pension benefits and future seem to evaporate.

Workers there, angered because they were not offered severance benefits, have lashed out at the company repeatedly since the proposed sale was disclosed earlier this year, and engaged in demonstrations.

Lucent plans to sell the plant for $2.7 billion to a joint venture between Japans Furukawa Electric and CommScope, a North Carolina-based manufacturer, which is expected to continue operating the plant and wholesaling equipment back to Lucent under contract. The sale is expected to close before a December deadline.

Further reading

CWA officials say the sale concerns them because CommScope uses non-union workers in its U.S. manufacturing facilities.

Lucent is also selling a switch manufacturing plant in Oklahoma City, and a wireless manufacturing plant in Columbus, Ohio, to Celestica, a Canadian electronics manufacturing company. That deal is valued at $10 billion and includes acquisition of inventory, assets and the manufacturing facilities. Celestica will also manufacture equipment for Lucent under the agreement. Together, the sales should reduce the Lucent workforce by some 5,000 employees.

In an update last month Lucent said its restructuring efforts would return the company to profitability next year and to parity with other telecommunications equipment manufacturers by 2003. The New Jersey company is planning to reduce its global workforce by another 17,000 this year.

But the maker of legacy and advanced voice and data communications gear has created a new legacy of its own - one of ill will, replacing a once-loyal workforce that had traced its roots to Western Electric, the original supplier to the national Bell telephone monopoly.

Betty Waugh, who was forced into retirement when Lucent closed a plant in Burlington, North Carolina two years ago, said she is among the tens of thousands who are now concerned over the loss of pension benefits that were tied up in Lucents now battered stock.

"I guess were keeping our fingers crossed that we wont lose everything," she said. "People here were loyal workers for decades, and this is, well, pretty hard to take now."

Other Lucent workers have sued the company over putting 401k funds into company stock, when executives knew, the complainants said, that the company was losing value. Those suits join stockholder litigation and a host of other lawsuits tied to the companys economic plunge. The company is also facing an investigation by the Securities and Exchange Commission over irregular accounting practices that resulted in overstatements of revenue and profits. That investigation is pending.

But the thorn that has been most painful for former Lucent employees was the recently announced multimillion-dollar severance packages for two top company executives who many blame for the companys failure to capitalize on its one-time technological leadership.

Former CEO Richard McGinn and former CFO Deborah Hopkins were paid $5.5 million and $3.3 million respectively in severance benefits, according to company documents filed with the SEC. McGinn and Hopkins have not commented.

Ralph Maly, vice president of Communications and Technologies for CWA, called the executive benefits "ludicrous," and an insult.

"It was a disgrace for employees and stockholders," he said. "The business was in a tailspin, they are cutting jobs to save money, and they pay that kind of package to these individuals. How do they justify that?"

Advertiser Disclosure:
Some of the products that appear on this site are from companies from which QuinStreet receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. QuinStreet does not include all companies or all types of products available in the marketplace.